With radio-pharmaceutical valuations riding high, Telix has assembled a unique product portfolio that exploits the natural synergy between radio-imaging and radiotherapy; meeting urgent unmet needs in kidney, prostate and brain cancer. Addressing substantial markets, the commercial strategy balances risk against reward. Well characterised and heavily de-risked imaging products and a niche orphan therapy sold direct by Telix lead the charge; a much anticipated renal cancer diagnostic entering pivotal phase III. The higher value clinical stage therapeutic programmes for big pharma partnering following close behind. De-risked and diversified, the stock looks substantially undervalued on the basis of our DCF, as well as the multi-billion dollar acquisitions and several-fold market capitalisations of key peers. We initiate with an OUTPERFORM recommendation and a target price of AUD 2.5 / share.
